Yes, the top 1% pay 27% of tax. No, they're not paying their share

First topic message reminder :

A single 30% rate of income tax is needed in order to boost growth in the UK, a report by lobbying groups says.

The 2020 Tax Commission's report also calls for the abolition of national insurance, and for the basic personal allowance to be raised to £10,000.
http://www.bbc.co.uk/news/business-18137548

This 'commission' made up of the Taxpayers' Alliance and Institute of Directors also wants to see further spending cuts.

It claims that in reducing the tax rate to 30% it will save a working couple on £28K a year £3400...

But it fails to give the tax saving to those currently on the 40% tax bracket..

Included in the recommendations are cuts to Stamp Duty, Inheritance Tax, Air Passenger Duty and a 5p cut in fuel duty. It would also replace Capital Gains Tax and Corporation Tax with a 30% tax on Dividends, Interest and Rents....

With, as I see it, only the 5p cut in fuel duty being the only item from which those under the 40% tax bracket benefiting, do you think you would be better off or is it just another tax change to benefit the rich?

kudos to HMRC - lets hope they recover a good slice of the billions of unpaid tax that's out there

Global companies (which trade internationally, and mainly seem to be American) are accustomed to recording their GB sales in low-tax places like Luxembourg or Grenada.

If Governments wish to introduce controls on such financing, it requires agreement only of the G8 Countries - not everybody in the world!

 
https://pbs.twimg.com/media/BPyb29KCEAA2O85.jpg

The ONS is not embarrassed by the necessity to revise its figures at intervals, and recent tax changes concerning the old-age pension are intended to simplify the byzantine complexity of Gordon Brown's various subsidies, rebates and clawback thresholds.
 
Time will tell who is actually better or worse off, but any household containing the boss of a British company may not be suffering too badly. Research reveals last year's bonuses for company directors reached 37.8% while workers saw average rise of just 2%. (Job Done, eh Gideon?)

http://www.guardian.co.uk/business/2013/jul/01/bosses-award-bonuses-workers-pay-rise?INTCMP=ILCNETTXT3487

Circumstances alter cases - The Anniversary Games

Scene One:
Athletes competing in the UK are liable for a 50% tax rate on their appearance fee as well as a proportion of their total worldwide earnings - which for Usain Bolt, who earns millions from endorsements, could be hugely costly.

HM Revenue & Customs won a case in 2006 brought by tennis star Andre Agassi. It successfully argued that as well as the prize money he accrued, a proportion of Agassi's worldwide sponsorship income was also earned during his time in the UK and was therefore taxable.

Scene 2
(Daily Telegraph) Usain Bolt gifted a tax-free trip to London for 2012 Games anniversary meeting at Olympic Stadium
George Osborne has granted a tax amnesty to overseas athletes competing in this summer’s London Grand Prix in the Olympic Stadium to ensure that Usain Bolt takes centre stage on the anniversary of the Olympic opening ceremony.


It's not only what you know and who you know, it's whether you are important for government propaganda.

Perhaps even more than income tax inequality is the system of giving freebies to the ultra-rich including bankers intent on fleecing the poor. The immorality of wonga pay-day loans means that the truly desperately poor can lose everything in one easy step, as the pay-day debit is quickly double what they borrowed, and repayment forever out of reach, so that the heavies can swiftly take from them everything they thought they owned.

Thanks for the detailed figures though - it makes it clear that the top 1% pay far less than the wage-earners pay out of their pay, proportionately, to the government.

50p tax letter business leaders gave £776,000 to the Tories

‘The Daily Telegraph’ published a letter yesterday from 24 businessmen, bleating about Labour’s plan to restore the 50% rate on that part of someone's income in excess of £150,000 a year. It was the usual stuff spewed out by the rich if anyone dares to suggest they ought to make a slightly bigger contribution – “recovery will be put at risk”, “loss of jobs” – just what they said about the introduction of the minimum wage in 1998.

The paper notes that one of the signatories, Richard Caring, the owner of Le Caprice and the Ivy restaurants, has an outstanding £2 million loan to Labour, but it chooses not to mention the large number of Conservative donors on the list. Of the 24 signatories, eight have donated a total of £776,111 to the Tories.

George Eaton writes:-

Why might the Tories not want these details to be known? Because it undermines the intended impression that this letter emerged spontaneously from "independent" business leaders and is suggestive of favours for favours. Few doubt that the ire of Conservative donors over the 50p tax rate was one of the factors that lay behind its abolition by the coalition last April. Indeed, anyone who doubts their influence over Tory policy should read Matthew d'Ancona's ‘In It Together: The Inside Story of the Coalition Government’, in which it is revealed that David Cameron vetoed the proposed introduction of a mansion tax on the grounds that "our donors would never put up with it".

For the predictable letter, along with a photo which shows Gove asleep at last year’s Tory conference:-
http://www.newstatesman.com/politics/2014/01/50p-tax-letter-business-leaders-gave-%C2%A3776000-tories

Governments have no money. Their only income is from taxes on the population. A bird in the hand is worth a dozen promises.

Give us a Million and we'll say no more about it. Thank you for your co-operation, Sir. Much obliged.

The Tories and Liberal Democrats say that the £10,000 personal allowance “takes the poor out of the tax system altogether”. It isn’t true, and of course it doesn’t take account of the 20% VAT, or the excise duty on fuel, tobacco, alcohol and gambling, which all people have to pay when they spend money, regardless of their income.

The biggest tax lie of all

From an article by Richard Evans:-

It’s amazing what a change of name will do. All you have to do is invent the term ‘National Insurance’ and you can pretend that income tax rates are a third lower than they really are. It’s so easy to assume that the basic rate of income tax is 20%. But it’s not – it’s 32%, once you add the 12% NI rate to the 20% income tax paid by those who earn less than about £42,000 a year.

We are in the extraordinary situation where someone who earns, say, £12,000 a year – barely a living wage in many parts of the country – hands over a third of every extra pound to the government. But although calling the basic rate of income tax 20% is quite a whopper, it’s not actually the biggest tax lie of all. That dubious accolade belongs to the claim, spouted by politicians of every hue, that their plans to raise the personal allowance, currently £10,000, will “take millions of people out of income tax altogether”. In fact, anyone who earns more than £7,956 a year hands over 12% of what they earn, although this tax wears its ‘National Insurance’ disguise.

http://www.telegraph.co.uk/finance/personalfinance/tax/11159508/The-biggest-tax-lie-of-all.html

Evans goes on to say: “Only by scrapping the distinction and incorporating NI into income tax will workers get a clear idea about how much of their wage packet they are forced to hand over to the taxman.” Of course no politician will dare to do this. Just imagine if a Labour government merged these taxes! The Tory lie and propaganda machine would swing into action and claim repeatedly that “Labour has increased your income tax by 12%”. It’s bad enough having Grant Shapps spread the bare-faced lie now that Labour is planning to tax everyone’s homes, when the proposal is for a mansion tax on properties worth more than £2 million (and even that would only apply to that part of the value of a property which exceeds £2 million).

In her headlong rush to create more inequality, Thatcher changed the rule that NI was paid on all income and imposed a cut-off point beyond which the better off had to make no additional contributions. At present, NI is paid at a rate of 12% on the first £42,000 of income, after which it becomes 2%. Maybe removing the ceiling on the standard rate, so that all income is once again liable to NI at the same rate, would be a good way of raising some money and a small start to reducing inequality in the UK?

"Maybe removing the ceiling on the standard rate, so that all income is once again liable to NI at the same rate, would be a good way of raising some money and a small start to reducing inequality in the UK?"

Definitely a good idea. Neil Kinnock was all set to do precisely that, until it was pointed out that the principal "losers" would be the middle-class, middle-income voters upon whom he would rely for support.

That hasn't changed.

oftenwrong. Three thoughts on that:-

1. You don’t announce before the election that everyone will be paying the same rate of NI. Why should Labour be upfront about such matters when the Tories never are? Between them, the last three Tory PMs (and let’s hope they are the last three Tory PMs) have presided over an increase in VAT from 8% to 20%. Were the increases ever announced in their manifestos? No chance! Thatcher had “no plans” to increase VAT and accused Shirley Williams of scaremongering for suggesting any such thing. However, papers released under the 30-year rule showed that Geoffrey Howe had briefed the Treasury on the proposed increase before the May 1979 election. Osborne used the same “no plans” line in 2010 and then increased VAT to 20% within weeks of sneaking into power on the backs of the Lib Dems. When challenged about a further possible VAT increase if the Tory nightmare continues after next May, Cameron has made a similar remark, from which we are left to draw our own conclusions.

2. To avoid hammering the so-called ‘squeezed middle’, the threshold at which the 40% income tax rate cuts in could be raised substantially to compensate for the NI increase. Personally, I'd also reduce VAT to 15% (the minimum standard rate allowed by the EU) at the same time, something from which everyone, but especially the poorest of us, would benefit.

3. It’s those people who have become obscenely richer in the last 35 years who must shoulder more of the tax burden. A mansion tax, and even a land value tax, would be a good start because both are hard to avoid. If Russian oligarchs sell up and leave London, the properties will still be in place and whoever buys them will still have to pay the tax. If such a policy starts a general reduction in house prices (unlikely, since most people can only dream of a home costing £2+ million), that might lead to a loss in revenue but would make houses more affordable. As far as I can see, it’s a win-win situation.

Ivan, if the top 1% are the richest in the country, what percentage of tax do you consider they should pay? 40-50% as a reasonable assumption?

"Why should Labour be upfront about such matters when the Tories never are?"

Why should younger voters dismiss all political parties as "each as bad as the other"?

OW do you think the younger voters are part of the top 1%?
If not they will not be paying 40-50% tax then will they?
They will enjoy seeing the rich bastards getting taxed properly though will they not?

Why should younger voters dismiss all political parties as "each as bad as the other"?

Because, as matters stand, they have no future unless they are going to inherit wealth?
Because, since Thatcher, inequality has been increasing?
Because further education, once a means of achieving social mobility, is now really only available to those whose parents can afford to give them financial help?

Myself when I got compensation for ill treatment by the NHS put money into an account where myself and her mother are trustees, so
when our daughter is old enough we use it to help pay her through college ETC, but that does not put us in the top 1%.

Today's newspaper headlines cover the threat of Europe's biggest Bank, HSBC, to give up its residence in the City of London and move somewhere else.

The decision comes in response to reforms for the UK finance industry that could mean banks must separate investment banking from the retail banking that serves everyday customers.

Read more: http://www.thisismoney.co.uk/money/markets/article-3052991/Return-Midland-HSBC-looks-future-British-retail-bank.html#ixzz3YFj3B3vg


Evidently the poor darlings think we're only interested in the taxes they pay when there's no way to avoid them.

Now perhaps they understand how some of their customers have felt during the recession.

But it won't leave them like their customers during the recession will it OW?

Data from the Office for National Statistics (ONS) annual report ‘The Effects of Taxes and Benefits on Household Income’ shows that the personal tax burden increased from 2010 to 2014 (the figures for this year won’t be available until next June).

The Tories have been lowering some income tax rates and raising allowances, but they take back significantly more than they give via indirect taxes such as VAT and taxes on alcohol, tobacco and cars.







Source: ONS

Meanwhile, the Banks continue to behave just as they choose, regardless of pin-pricks from either Osborne or the Bank of England.  Barclays propose to reorganise their corporate structure so as to place the Retail Branches under the control of their Finance Investment Division.  (Those friendly folk who originated the crisis in 2008).  It's to preserve the casino banking arm's Credit Rating, apparently.

So that's alright then, isn't it?